Marketing to a Segment of One


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  • You may or may not recognize this photograph.This picture shows Omnicom CEO John Wren and Publicis CEO Maurice Levy shaking hands on the NYSE after the two companies agreed to merge in $35.1 billion dollar deal in July.The merger has created the world’s largest advertising agency – PublicisOmincom – surpassing WPP.Why am I showing this photograph?
  • The reason behind the merger represents a pivotal change in the world of marketing and suggests that we have moved into a new era.It is summed up in this quote from Maurice Levy. READ QUOTE.This is marketing to a segment of one.By joining forces Omnicom and Publicis hope they will be better equiped to compete in an industry increasingly dominated by data-driven analysis and the automated trading of ad space. Companies such as Google, and adobe are moving deeply into the industry.In a world where advertisers need to data to market to a segment of one companies like Google have a head start.
  • One-to-one marketing isn’t a new concept. We’ve been discussing it for decades. So why now?Today I’m going to discuss 4 areas which have changed dramatically in the just the past few years that have made marketing to a segment of one more important than ever.I’ll discuss the implications of Big Data…..where we are heading with technology, the impact of channel proliferation and how consumer expectations are evolving amidst all of this change.
  • The worldwide interest in the term Big Data is new phenemenon. A search for big data on Google Trends shows how it has interest in big data has risen dramatcially in just the past 2 years and it is a global trend trend with high levels of interest in countries like India, South Korea and Singapore.Big Data wasn’t discovered in 2012 – we have been dealing with data for years – but the volume of data has increased exponenentially in just the past few years since the launch of companies like Google and Facebook.What distinguishes Big Data from large scale data processing that came before is the ability to analyze unstructured data sets in realtime.I’m sure you’ve all seen those impressive stats about the number of terrabytes of data that now exis – not worth quoting because they are immediately out of date as more and more data is added each second.
  • The amount of information that Google captures on each consumer is quite incredible.You can actually view the information that google has captured on you personally on google dashboard.Google dashboard is a one-stop shop that links to all of your different buckets of stored data collected by google from your first gmail account onwards and including all of your searches and every video you have watched on youtube.Wall Street Journalist report Tom Gara wrote about Dashboard in July and published this infographic to illustrate all of the information google has on him including all of the emails since 2004.
  • Big phone companies have begun to sell the vast troves of data they gather abouttheir subscribers' locations, travels and Web-browsing habits.This infographic – again thanks to the Wall Street Journal – shows how Verizon gathers data from users including location and web browsing.That info is sent to a database to be combined with other demographics such as age and gender which is then sold to marketers such as sports arenas, billboard companies and shopping venues.
  • And of course, the government has more data than anybody as recently exposed by Edward Snowdeon – although I doubt it was much of a surprize the govt has access to google, facebook including our emails and is the NSA is actively mining the data for security threats. This has raised the issue of privacy – you see a demonstrater in DC with placquard saying hands off my meta data. More on privacy when we discuss the consumer later.
  • Many people in our industry to be a Big Data to be a buzz word. After all we have been analyzing huge data sets for years. Direct Mareting is all about data driven accountabile campaigns. However, Big Data has raised the bar for direct marketers.For my raising the bar analogy I’d like to use the men’s high jump world record which continued to rise steadily between 1910 and 1960. In the 1960’s however it really jumped - excuse the lame pun – when a gentlemen called Dick Fosbury introduced a new style of jumping which came to be known as the Fosbury Flop. That took the men’s high jump record to new hights. Similarly Big Data has taken marketing to a segment of one to a whole new level.
  • Each second around 9,000 new tweets are posted on twitter the micro blogging site.A group of researchers at IBM’s Almaden Research Centre in San Jose, California, have now picked up on some previous work done around profiling bloggers based on the words they used and applied it to Twitter. The team, lead by Eben Haber, hope to discover the “deep psychological profiles” of tweeters. Analysing three months’ worth of data from 90m users (of about 200m worldwide), they argue that so far they have been able to gauge someone’s personality reasonably well from 50 tweets, and even better from 200.
  • Likefolio is a new web site leverages the power of social media to help prospective investors understand not just what they know - but what their friends and connections in the social world know as well. A partnership between TD Ameritrade and SwanPowers.This web site aggregates conversations happening within users' social networks and tracks status updates, likes and check-ins against a proprietary database filled with keywords and phrases linked to publicly-traded companies.LikeFolio shows users the top five publicly traded companies their networks are talking about and what those companies do. It then translates that information into potential investment ideas by showing users how a portfolio of those five securities would have performed over a 12-month period after an initial investment of $10,000.
  • The insurance world has been talking about telematics – usage based insurance - for some years. Progressive’s Snapshot and AllstatesDrivewiste have been available on a voluntary basis in select locations. If you don’t know it involves attaching a device to your car to monitor your driving such speed, acceleration etc and based on that you can get a discount on your premium.The big development this year is that State Farm – the country’s largest insurer – is pushing its drive safe and save program in every state by the end of 2013.
  • In credit cards AmEx has been promoting My Offers. My offers tap into AmEx user spending histories and location data--what the company refers to as the "spend graph"--to rank offers by relevance” – Visa has a smiliar service in beta. Capital One deals and BankAmerideals have similar programs based on spend history.
  • Digital age and data have driven that mergerData is being used in more creative waysYes, we’ve been analyzing data for years but the amount and type of data is differentMarketing to a segment of one.
  • According to Mintel research, smartphone ownership among adults aged 18+ has increased from 41% in November 2011 to 56% in June 2013. While ownership is highest among those aged 25-34 (with those aged 18-24 a close second), it grew the most—55%—among those aged 45-54.
  • We get so much usage out of our phones these days. From searching the internet to using apps to social media to video streaming. Generates so much data with potential applications for marketers. 30% of cell phone users are streaming videos – extremely high given then next battle in social which we will get to in a minute.
  • Tablet ownership has increased as well, jumping from 25% of adults aged 18+ in January 2012 to 33% in June 2013. Between February 2012 and June 2013, tablet ownership jumped 80% among those aged 18-24 and those aged 35-44, the highest increase among all age groups. There was a 40% increase in tablet ownership among those aged 25-34.
  • One area of with the biggest potential is geolocation. Currently the GPS systems that we have in place can take you to the store but not inside.A start up called Estimote has a plan to break that barrior and take geo-location in-store.The hardware takes the form of a “mote,” a waterproof beacon that houses a Bluetooth Low Energy radio. Each mote can sense the presence of a Bluetooth Low Energy-equipped smartphone. Add a few more motes and they’ll communicate with each other, triangulating the position of that smartphone in space. One mote could tell a mom-and-pop coffee shop that you’d walked in the door; six could tell it you were hunched over the pastry case.Geolocation is set to get even more precise.
  • The new battle in social is video sharing. In June Instagraph launched video on instagram which allows you to post and share 15 second video clips (vs 6 seconds on Twitters Vine). It will impact a huge number of people due to Instagram’s current reach– approximately 130 million monthly users, who have shared 16 billion photos to date. Engagement on the app is high: Over 1 billion “likes” are added to the service every day. It adds to the amount of data.
  • The future is wearable devices, whether glasses or a watch.The tech world is super excited about the Google Glass Prototype. Ten thousand or more Google Glass units are now shipping to beta testers and winners of the If I Had Glass contest -- for a $1,500 price tag. These early frames ship with the ability to take the very most recent communications from your smartphone or Google accounts and show them to you in a head-up display. They take phone calls. They send texts, take photos and video, and show maps. They deliver search results.
  • Marketing applications are still being developed and geolocation will get more precise.Second screen viewing becoming increasingly important offering up opportunities.The new battle is social is video sharing with 30% streaming videos provides a rich unstructured source of content that could be mined.Wearable devices represent the future
  • As new marketing channels emerge, traditional channels have remained strong. As a result consumers have to navigate an increasingly cluttered marketing environment. This slide shows the reality for a typical consumer.Using Comperemedia’s Lifecycle panel – and looking at just 2 key channels, direct mail and email for an individual panelist – this panelist who is aged 50-55 and lives in DC with an income of 75-99k received 1400 marketing messages in the past year. Most of these were via email. 100 were direct mail.Relevant, targeted marketing messages are required to stand out and break through the clutter.
  • In a recent Mintel Oxygen Report on Consumer Attitudes towards marketing channels we found that TV is still the most important channel when it comes to marketing financial services. Direct marketing channels – dm and email come in second and third. New channels such as mobile advertising are starting to register.Profliferation of channels makes it even more important for these channels to work together to serve up relevent content.Multi-channel marketing is not new but there is a growing belief that when channels coordinate the whole can be greater than the sum of the parts.
  • The phrase omnichanel marketing has emerged from the retail sector and has been gaining traction in the past year.In the Macy’s 2012 annual report the term omnichannel was mentioned 30 times.Many retailers such as Target and Brookes Brothers have created senior positions such as Chief Omnichannel Officer and President of Multichannel Marketing.At look at this chart shows you why omnichannel is so important to retailers.It shows online retail sales projected through 2016 in Trillions? Along with web-influenced offline spend and non-web influenced.The fastest growth is the web influenced – researching online and then purchasing in store. That is why so important for the channels to be in sync.
  • As retail leads the way consumers will come to expect a harmonious channel experience.Omnichannel could be considered just another buzz word or interchangeable with mult-channel marketing but the difference is that – in an ideal environment - it put’s the consumer at the center serving up offers and experiences that a relevant and targeted.
  • Relevant and targeted messages are required to stand out.As a result marketers need to find new strategies to gain an advantage.This will have a knock on impact on other industriesThe word is gaining traction – today’s track is the omichannel track.
  • So what about the consumer?Data recently published by Janrain/Harris Interactive suggests that in today’s world consumers expect relevant content.74% frustrated, 57% would leave a site.Yet also willing to share information if they get something relevant in return.
  • On the other hand, it has to be genuine. Consumers are fooled by superficial personalization.This chart from Lyris and the Economist Intel Unit shows some interesting statistics for respondents in the US and the UK.Marketing messages are up – now surprise when we think of the volume of messages.Personalized content is up.The response to personalized content is not so favorable – only 32% agree that it is beneficial.Final bar shows you why – 70% superficial.
  • The answer is no. What consumers want is customization rather than superficial personalization. This chart again from Lyris and the Economist shows net consumer preferences – percent prefer most minust percent prefer list. On balance consumers prefer recommendations for products they like, conten that is individualized for them personallay and the customized presentation of web pages.
  • Usually, when someone sneaks up to a rich guy's house and drives off with a Porsche, it's a reason to call the police. This time, it might be a reason to call an auto dealership.In a clever spin on direct mail for a Canadian auto-dealership, their ad agency photographed a Porsche in the driveway of affluent homes.They would take this picture, print it on the spot, make it into a beautiful direct mail piece that read, “It’s closer than you think” and slip this completely individualized piece under the door or in the mailbox. The result, according to the agency's case study video, was a 32 percent response rate to a site where recipients could schedule a test drive. Direct mail is typically about hitting as many people as possible for as low a cost as possible, but this creative idea shows that for luxury brands, a smaller effort can sometimes go a long way.
  • And banks are starting to connect the dots. Look at this personal touch from US Bank in a recent credit card acquisitioin direct mail piece promoting its Cash Rewards Visa Card. After your recent conversation….On the right is a cross-sell email from Citi bank promoting its Simpicity card to Citimortgage customers. Email can be easily adapted to many different customer profiles.
  • Bank acquisition offers for new savings accounts tend to be mass market in nature. This recent offers from Chase promoting Chase Plus Savings emphasize the relationship and Chase’s commitment to customers. Chase wants you to meet-on-one one with a banker and it includes the address of the local branch.
  • I want to end by touching on the issue of privacy. I’ll start with the classic New Yorker cartoon from the early days of the internet.Of course, as we can see now everybody knows you are a dog.
  • Target, one of the smartest companies in the field of predictive analytics picked up some negative publicity in the NY times magazine last year. You have may have read the story.Target identified that the birth of a child was the best life-event to quote-unquote capitalize on.With the goal of identifying pregnant women, Target utilized their massive database of purchase behavior to learn that when a woman purchases large quantities of unscented oils and lotions and also vitamins such as calcium and magnesium and zinc, they are highly likely to be pregnant (it’s slightly more complicated than that – but Target can essentially estimate the due date to an accuracy of within two weeks from the actual due date). Armed with this incredible edge over their competitors Target personalized their mailers and started sending coupons to women that their systems deemed pregnant. One such mailer reached a Dad of a high school girl and he was furious at Target for sending all baby-related coupons. He believed that these coupons were almost an encouragement for his daughter to get pregnant. Long story short, Target’s system was accurate and the daughter had not yet informed her dad about the pregnancy. Target was of course not too thrilled with the unwanted attention.
  • When it comes to privacy it is no surprize to hear that Millennials are more comfortable with sharing their information than those aged 35+.While all respondents tend to think that no one should have access to personal data there is a willingness to share information if they get something in return.
  • As Millennials age and more people get exposed on the internet maybe Millennials are starting to care more.You may have heard of snapchat. Snapchat is a photo messaging service whereby users take photographs or send videos and recipients can only view them for 1-10 seconds.The evidence is then deleted from the Snapchat server. Extremely popular app
  • Mass marketing or incorrectly targeted marketing causes frustrationThey don’t want superficialExamples from US Bank, Citi and ChaseThey know they can’t get relevant offers without giving up information
  • So I thought it apt to close with a quote from Jonathan Nelson, CEO of Omnicom’s digital business.And that’s what marketing to a segment of one is all about – giving marketers an edge.
  • Marketing to a Segment of One

    1. 1. Marketing to a Segment of One Andrew Davidson SVP, Mintel Comperemedia
    2. 2. Mintel Comprehensive consumer, market & direct marketing research COMPEREMEDIA A 360º view of today's marketing, from direct mail to email to print to online display – now mobile ads too! More than 70,000 active participants each year OXYGEN 700+ proprietary consumer and market research reports, written by industry experts We ask 50+ questions to 5,000 consumers each day ? ? ?
    3. 3. Digital Age Drives Publicis-Omnicom Merger “It’s trillions of data that we have to crunch in order to go down to very small segments or clusters of the population to deliver some single messages to very small groups of individuals. For that we need scale.” Maurice Levy, CEO, PublicisGroupe (speaking about the merger between Omnicom and Publicis)
    4. 4. Marketing to a Segment of One: Why now? Channel Proliferation Big Data Technology Consumer Expectations
    5. 5. Big Data
    6. 6. Worldwide Interest in Big Data Source:
    7. 7.
    8. 8. Phone Firms Sell Data on Customers
    9. 9. The Government and Big Data
    10. 10. Big Data Raises the Bar
    11. 11. Gauge a Personality from 50 Tweets
    12. 12. likeFolio Uses Social Media to Pick Stocks Email: 20130726-0511097 Source: Mintel Comperemedia
    13. 13. AmEx and the Spend Graph Email: 20130306-051936 Source: Mintel Comperemedia Andrew
    14. 14. Merger of ad “giants” suggests a paradigm shift has taken place Big Data is more than just another buzz word Big Data has raised the bar for data use in general(big or not!) The use of data is fueling a trend towards “relevant” marketing
    15. 15. Technology
    16. 16. SmartPhone Ownership Continues to Rise Source: Mintel Oxygen, “Consumer Attitudes toward Marketing Channels,” August 2013 41 52 63 53 33 30 12 56 77 78 71 51 35 23 All 18-24 25-34 35-44 45-54 55-64 65+ 11-Nov Jun-13 Smartphone Ownership Base: 2,000 internet users age 18+ %
    17. 17. Smartphone Users are Searching More Than Anything Else Top Online Activities Conducted on a Cell Phone Base: 2,000 internet users age 18+ Source: Mintel Oxygen, “Mobile Advertising,” May 2013 45% 43% 35% 33% 30% 24% 23% 21% 19% 18% Search Visited web Used an app Social networking Video streaming Internet radio Mobile social networking Online gaming Microbloging Online shopping
    18. 18. Tablet Ownership Continues to Rise Source: Mintel Oxygen, “Consumer Attitudes toward Marketing Channels,” August 2013 23 20 35 25 26 17 13 33 36 49 45 28 21 18 All 18-24 25-34 35-44 45-54 55-64 65+ Feb-12 Jun-13 Tablet Ownership Base: 2,000 internet users age 18+ %
    19. 19. Estimote Beacons Bring Geolocation Indoors
    20. 20. Instagram Launches 15-Second Video Sharing Feature
    21. 21. We are still catching up with the rapid growth of smartphones and tablets The new battle in social is video-sharing Geolocation will get more precise Wearable devices represent the future
    22. 22. Channel Proliferation
    23. 23. The Cluttered Mailbox Dataset # of Pieces Email 1,125 Direct Mail 99 Panelist #778083 Washington, DC Age: 50-55 Income: $75K-$99K 1,400 total pieces observed from August 2012 through July 2013
    24. 24. TV Still the Most Noticed Channel for Financial Services 9 10 12 16 17 18 20 23 29 34 46 Mobile ad Other online ads Ads on social network sites Radio ad Brochures/branch signage Billboards Magazine/newspaper ad Statement insert received in postal mail Email ads Direct mail marketing piece Television ad Financial Services Marketing Channels Consumers are Most Likely to Notice Base: 1,925 internet users aged 18+ who have a listed financial product % Source: Mintel Oxygen, “Consumer Attitudes toward Marketing Channels,” August 2013
    25. 25. The Importance of Omnichannel Retailing $202 $226 $252 $278 $304 $327 $1103 $1206 $1320 $1429 $1552 $1660 $1672 $1723 $1741 $1771 $1780 $1812 2011 2012 2013 2014 2015 2016 U.S. Cross-Channel Retail 2011-2016 Online Retail Sales Web Influenced Offline Spending Non-Web Infuenced Offline Retail Sales Source: Forrester Research (In$billions)
    26. 26. Adapting to the Omnichannel Environment
    27. 27. Consumers are being bombarded with messages via multiple channels Marketers need to find new strategies to gain a competitive advantageRetailers have acknowledged the importance of omnichannel Omnichannel put’s the consumer first instead of the channel
    28. 28. Consumer Expectations
    29. 29. Consumers Expect Relevant Content
    30. 30. Consumers aren’t Fooled by Superficial Personalization
    31. 31. Consumers Want Customization Over Personalization
    32. 32. Banks are Starting to Connect the Dots DM: 20130516-011461 Email: 20130301-051553 We appreciate having you as a CitiMortgage customer. That’s why we are inviting you to apply for the Citi Simplicity card. After your recent conversation with our banker, we noticed your excellent credit history and are excited to pre-approve you for the U.S. Bank Cash Rewards Visa Card. Source: Mintel Comperemedia
    33. 33. Personal and Personalized Source: Mintel Comperemedia Emphasis on the“relationship” and “commitment to our customers” Meet one-on-one with a banker Nearest Chase branch DM: 20130711-011780
    34. 34. Nowhere to Hide 1993 2013
    35. 35. Target Knows You are Having a Baby New York Times Magazine: February, 2012
    36. 36. Millennials Less Concerned About Privacy 19% 42% 40% 77% 25% 56% 51% 70%
    37. 37. Maybe Millennials are Caring More? Snapchat: • Photo messaging service • Users take photos, record videos (known collectively as snaps), add text and drawings • Users set a time limit for recipients from 1 to 10 seconds • Snaps are then hidden and deleted from the Snapchat server
    38. 38. Consumers expect relevant marketing messages Consumers want customization not personalizationSome banks are starting to connect the dots as they seek deeper customer relationships Consumers are willing to trade personal information for something in return
    39. 39. Closing Thought “We are borrowing black-box trading techniques out of Wall Street; we are looking at genetic algorithms; we are looking at artificial intelligence; we are looking at predictive models; we are looking at anything that might give marketers an edge.” Jonathan Nelson, CEO of Omnicom’s digital business